Bitcoin’s short-term correlation with the S&P 500 has turned negative recently, but on-chain analyst Axel Adler Jr. warned in his March 31 Morning Brief that this is not the bullish signal it might appear to be.
The more telling metric, the BTC/S&P price ratio, has been declining since the start of the year and continues to show that Bitcoin is underperforming equities, not breaking away from them.
Weak Relative Strength Keeping Bitcoin Tied to Equity Market Pressure
Adler’s analysis centers on two metrics that together paint a more complete picture of where Bitcoin sits in the current market. The first is the 13-week BTC-S&P correlation, which measures how closely the weekly returns of the two assets have moved together over a short window. That reading has recently turned negative, meaning the two assets have been moving less in sync.
At face value, this might suggest Bitcoin is starting to trade independently of equities. Adler pushes back on that interpretation. According to him, a falling correlation only means the synchronicity of price moves has become less clean, not that Bitcoin is gaining strength. Isolated BTC bounces alternating with continued S&P weakness can produce a negative correlation reading without the cryptocurrency actually doing better than stocks.
The second metric is the BTC/S&P price ratio, which is the more direct measure of relative performance. A rising ratio means Bitcoin is outperforming the index, while a falling ratio means the opposite. As per Adler’s assessment, since January 2026, that ratio has dropped quite noticeably and has been under pressure in recent weeks. The analyst said it means that even during the periods when short-term correlation broke down, BTC did not turn into a safe haven asset or post sustained gains relative to equities.
His conclusion was that the market is still pricing Bitcoin as a higher-risk asset with a larger drawdown potential than the S&P 500. He also addressed what a genuine decoupling would look like, with the trigger, according to him, not a correlation reading but a sustained upside reversal in the BTC/S&P price ratio that would hold as a new stable regime, not just for a single week. Adler says that right now, that confirmation is not there.
Price Action and Macro Backdrop
Bitcoin touched a monthly low of just under $65,000 earlier this week before it recovered to go past $68,000. There, it was rejected as new developments in the US-Iran conflict weighed on sentiment.
At the time of writing, the asset was trading near $67,000, down 1.4% in the last 24 hours and about 6.5% over the past week. The worst performance was across 14 days, with BTC shedding nearly 10% of its value, while across 30 days, it was the complete opposite, as it stayed almost flat, being only 0.3% in the red.
The geopolitical backdrop has added a layer of uncertainty that is difficult to model, with oil prices climbing roughly 50% since late February, driven by supply-side fears tied to disruptions in the Strait of Hormuz. Adler’s analysis suggests Bitcoin is unlikely to escape the same gravitational pull, regardless of what short-term correlation readings show, as long as the S&P 500 is still under pressure.
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